Our revenue fluctuates quarterly and is generally higher in the second and fourth quarters of our fiscal year. Cloud usage and demand benefited as customers accelerate their digital transformation priorities. Forward-looking statements may appear throughout this report, including the following sections: Business, and Managements Discussion and Analysis of Financial Condition and Results of Operations. dollars)." By combining the Internet of Things, AI, and mixed reality, this platform layer enables the creation of rich digital twin simulations of real-world processes, places, and things so organizations can monitor complex systems in real time, interact within them using mixed reality, and run simulations to model, analyze, and predict performance. Typical Corporate scale customers are similar to Managed accounts, with: High revenue: USD100K+ -or-High potential: USD100K+ -or- Our growth mindset culture begins with valuing learning over knowing seeking out new ideas, driving innovation, embracing challenges, learning from failure, and improving over time. If recognized, the resulting tax benefit would affect our effective tax rates for fiscal years 2021, 2020, and 2019 by $12.5 billion, $12.1 billion, and $12.0 billion, respectively. Overview and forecasts on trending topics, Industry and market insights and forecasts, Key figures and rankings about companies and products, Consumer and brand insights and preferences in various industries, Detailed information about political and social topics, All key figures about countries and regions, Market forecast and expert KPIs for 600+ segments in 150+ countries, Insights on consumer attitudes and behavior worldwide, Business information on 60m+ public and private companies, Detailed information for 35,000+ online stores and marketplaces. We describe risks and uncertainties that could cause actual results and events to differ materially in Risk Factors, Managements Discussion and Analysis of Financial Condition and Results of Operations, and Quantitative and Qualitative Disclosures about Market Risk in our fiscal year 2021 Form 10-K. The metrics are disclosed in the MD&A or the Notes to Financial Statements. We applied a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date to align our credit loss methodology with the new standard. Office Consumer products and cloud services revenue increased 10% and Microsoft 365 Consumer subscribers increased to 51.9 million. A number of companies, such as Red Hat, supply versions of Linux. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. For software warranties, we estimate the costs to provide bug fixes, such as security patches, over the estimated life of the software. This is why we launched the Microsoft Cloud for Sustainabilityto create a new business process category that will help every organization measure, report, and reduce their environmental impact. Building and running cloud-based services in ways that unleash new experiences and opportunities for businesses and individuals. In its 2022 financial year, Microsoft generated 63.4 billion U.S. dollars from its productivity and business processes segment and a further 75.3 billion . Okta, Proofpoint, and Symantec provide security solutions across email security, information protection, identity, and governance. Microsoft's recent Q3 earnings uncovered several crucial trends that will drive its Dynamics software products and LinkedIn revenue higher. Show publisher information ET As of June 30, 2021, the primary unresolved issues for the IRS audits relate to transfer pricing, which could have a material impact in our consolidated financial statements when the matters are resolved. These programs reinforce our culture and values such as collaboration and growth mindset. These contracts are not designated as hedging instruments and are included in Other contracts in the tables below. Localizing a product may require modifying the user interface, altering dialog boxes, and translating text. Microsoft Edge is our fast and secure browser that helps protect your data, with built-in shopping tools designed to save you time and money. This pricing methodology applies to our Level 2 investments, such as commercial paper, certificates of deposit, U.S. agency securities, foreign government bonds, mortgage- and asset-backed securities, corporate notes and bonds, and municipal securities. At Microsoft, were providing technology and resources to help our customers navigate a remote environment. $ 35,058. For derivative instruments designated as cash flow hedges, gains and losses are initially reported as a component of other comprehensive income and subsequently recognized in earnings with the corresponding hedged item. Growth depends on our ability to attract new users, understand intent, and match intent with relevant content and advertiser offerings. We encourage investors, the media, and others interested in Microsoft to review the information we post on the social media channels listed on our Investor Relations website. This statistic is not included in your account. Customers may purchase perpetual licenses or subscribe to licenses, which provide customers with the same functionality and differ mainly in the duration over which the customer benefits from the software. There are two broad categories of OEMs. Executive Vice President, Chief Commercial Officer, Bradford L. Smith We typically have more than one SSP for individual products and services due to the stratification of those products and services by customers and circumstances. Market Cap. These systems are augmented by written policies, an organizational structure providing division of responsibilities, careful selection and training of qualified personnel, and a program of internal audits. Chairman and Chief Executive Officer The following table sets forth the potential loss in future earnings or fair values, including associated derivatives, resulting from hypothetical changes in relevant market rates or prices: Our consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis (May 1 for us) and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Care is the new currency for every leader, and weve built a new framework to help our managers strengthen their teams and deliver success through empowerment and accountability. The earnings provide a further lift to Microsoft after it agreed to acquire gaming giant Activision Blizzard in a $68.7 billion, all-cash deal. The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year, and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an entitys financial statements or tax returns. Our corporate learning portal has over 100,000 average monthly active users. We have audited the accompanying consolidated balance sheets of Microsoft Corporation and subsidiaries (the Company) as of June 30, 2021 and 2020, the related consolidated statements of income, comprehensive income, cash flows, and stockholders equity, for each of the three years in the period ended June 30, 2021, and the related notes (collectively referred to as the financial statements). Azure Synapse Analytics, a limitless analytics service, brings together data integration, enterprise data warehousing, and big data analytics for immediate business intelligence and machine learning needs. 88% of employees globally participated in our fiscal year 2021 MS Poll engagement survey, which covers a variety of topics such as inclusion, pay and benefits, and learning and development. The Microsoft Cloud is the most comprehensive and trusted cloud, providing the best integration across the technology stack while offering openness, improving time to value, reducing costs, and increasing agility. The fair value of stock awards was estimated on the date of grant using the following assumptions: During fiscal year 2021, the following activity occurred under our stock plans: As of June 30, 2021, there was approximately $12.0 billion of total unrecognized compensation costs related to stock awards. The Company engaged Deloitte & Touche LLP, an independent registered public accounting firm, to audit and render an opinion on the consolidated financial statements and internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States). Artificial intelligence (AI) capabilities are rapidly advancing, fueled by data and knowledge of the world. Azure is a trusted cloud with comprehensive compliance coverage and AI-based security built in. The Microsoft Cloud Solution Provider program offers customers an easy way to license the cloud services they need in combination with the value-added services offered by their systems integrator, managed services provider, or cloud reseller partner. Continuing . In 2013, the defendants in the consolidated cases moved to exclude the plaintiffs expert evidence of general causation on the basis of flawed scientific methodologies. Microsoft. Additionally, we have seen growth in our Black- and African American-owned supplier base and in Black- and African American-owned technology partners in the Microsoft Partner Network, and we launched the Black Channel Partner Alliance community to support partners onboarding to the Microsoft Cloud and to unlock partner benefits for co-selling with Microsoft. Azure Synapse brings together data integration, data warehousing, and big data analytics so organizations can query data on their own terms at any scale. It transforms how people connect holographically with others in a natural way. Customer mix between consumer, small and medium businesses, and large enterprises. We have recast certain prior period amounts to conform to the way we internally manage and monitor our business. The company's gross margin guidance will remain at above 20 percent . Zoom offers videoconferencing and cloud phone solutions. Digital transformation that was projected to happen over the next 10 years is happening today. For derivative instruments designated as fair value hedges, gains and losses are recognized in other income (expense), net with offsetting gains and losses on the hedged items. The company's Intelligent Cloud segment continued to lead revenue growth, up 25.5% compared to the year-ago quarter. During fiscal year 2020, we recorded an impairment charge of $186 million to Property and Equipment, primarily to leasehold improvements, due to the closing of our Microsoft Store physical locations. Total capitalized costs to obtain a contract were immaterial during the periods presented and are included in other current and long-term assets in our consolidated balance sheets. We saw improvement in customer advertising spend and savings in operating expenses related to COVID-19, but experienced weakness in transactional licensing. Our CSR Reports Hub provides detailed information on law enforcement access to data, our environmental data, our political activities, our workforce demographics, and our human rights work. During the periods presented, we reported our financial performance based on the following segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The following table outlines the estimated future amortization expense related to intangible assets held as of June 30, 2021: As of June 30, 2021 and 2020, the estimated fair value of long-term debt, including the current portion, was $70.0 billion and $77.1 billion, respectively. Price Quote as of 2/17/2023 4:00:00 PM - ET. In fiscal year 2020, our U.S. income before income taxes was $24.1 billion and our foreign income before income taxes was $28.9 billion. We design our devices, from Surface to Xbox, to minimize their impact on the environment. Additionally, we have agreed to cover damages resulting from breaches of certain security and privacy commitments in our cloud business. The purchase price allocation as of the date of acquisition was based on a preliminary valuation and is subject to revision as more detailed analyses are completed and additional information about the fair value of assets acquired and liabilities assumed becomes available. Cost of revenue is allocated in certain cases based on a relative revenue methodology. As described in our 2020 Proxy Statement, annual performance and compensation reviews of our senior leadership team include an evaluation of their contributions to employee culture and diversity. statistic alerts) please log in with your personal account. Diluted EPS is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. 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